Valuing variations under FIDIC in the Gulf

On a FIDIC contract in the Gulf, a variation is a change to the works that the Engineer instructs under Clause 13. It can be a change in quantity, in quality, in level or position, in the sequence or timing, or the omission of work. What it is not is a free negotiation. The contract already tells you how the change is valued, and the surveyor's job is to apply that order rather than argue a number.

Instruction first, valuation second

The Engineer has the right to vary under Sub-Clause 13.1, and can either instruct the variation or request a proposal for it. The point that catches contractors is that work done without an instruction is at risk. A verbal direction on site, a marked-up drawing, an email that stops short of instructing: none of these is the instruction the certificate needs. Get the instruction in writing before the work, or the money follows the argument rather than the record.

The three rates

Sub-Clause 12.3 sets the order for valuing measured work, and Clause 13 draws on it for variations. The rule runs down a short ladder.

• The bill rate. Where the varied work is the same character and carried out under the same conditions as an item in the bill of quantities, that rate applies.
• A rate derived from the bill. Where the work is similar but the quantity or the conditions have changed enough to make the bill rate unreasonable, a rate is built from the bill rate as a base.
• A new rate. Where there is no comparable item, a new rate is agreed or determined from the actual cost plus reasonable profit.

The ladder matters because it protects both sides. The contractor is not held to a rate that no longer fits the changed conditions, and the employer is not exposed to a fresh negotiation on work the bill already priced.

Keep the variation and the claim apart

A variation is the value of instructed change. A claim, under Clause 20, is a request for additional payment or time arising from an event, and it is proved and notified separately. Folding a delay cost into a variation rate is how surveyors lose both, because the Engineer sees a padded rate and cuts it, and the claim that should have carried the cost was never notified. Value the variation on the Clause 13 rules, and run the time and cost consequences as the claim they are.